Cheapest Medicare drug policies to run 44% more next year
WASHINGTON -- The cheapest drug insurance policies under Medicare will cost elderly and disabled Americans 44 percent more next year, based on rate quotes published by the government health program.
The average monthly outlay for the least expensive plans will rise to $13.58 from $9.46, according to data compiled by Medicare. Humana Inc., the biggest provider of low-cost drug plans, raised prices as much as fivefold, while Medicare cut its monthly subsidy by 15 percent, to $80 a person, said Peter Ashkenaz, a Medicare agency spokesman.
Americans who are at least 65 and those with disabilities pay monthly premiums for the drug coverage under a federal program that started in January. Insurance companies last year charged as little as $1.87 for policies providing discounts on medicines. For next year, the cheapest plan will cost $9.50. Many of the 23 million people in the Medicare drug program pay premiums out of Social Security pensions, averaging $922.70 a month.
``Many people are going to feel that they are victims of a bait-and-switch tactic," said Ron Pollack, executive director of Families USA, a nonprofit group that studies healthcare, in a telephone interview. ``There's no question that it will be an extraordinary disappointment."
Congress created the Medicare drug benefit three years ago to help the elderly buy medicines. The price of almost 200 prescription treatments often used by older people rose 6.3 percent in the 12 months through June, according to AARP, the largest lobbying group for Americans 50 and older.
The drug plan next year will account for about 12 percent of Medicare's $445 billion budget, according to the Congressional Budget Office. Medicare pays insurance companies to negotiate bulk discounts on medicines such as Pfizer Inc.'s Lipitor cholesterol drug, which can cost $3 a pill.
An analysis by Representative Henry Waxman, a California Democrat, found that the average monthly payment for all Medicare plans would rise to $29.09 next year from $25.69. The plans include those with enhanced benefits, in which customers accept a higher premium in return for payment of drug costs between $2,400 and $3,850, which aren't covered by Medicare.
Health and Human Services and Medicare officials released next year's prices Sept. 29, saying the average monthly premium would remain unchanged at $24.
``The department's numbers appear to be wrong, and they disguise significant increase in premiums for Medicare drug plans," Waxman said in a letter to Health and Human Services Secretary Michael Leavitt. ``The release of erroneous information about the cost of premiums -- whether deliberate or not --is a disservice to millions of seniors."
Medicare stands by its estimate, which includes the cost of stand-alone drug plans and programs where people sign up with insurance companies for administration of all of their benefits, said Mark McClellan, the administrator of the Centers for Medicare and Medicaid Services, in a letter to Waxman.
``There are very many good options available at low costs," McClellan said yesterday.
